Where to for house prices in 2013?

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The usu­al sus­pects are talk­ing up the prospects for Aus­tralian prop­er­ty prices as the New Year approach­es, with per­mab­ull and Aus­tralian Prop­er­ty Mon­i­tors senior econ­o­mist Andrew Wil­son fore­cast­ing 3–5 per cent growth nation­al­ly, and BIS Shrap­nel man­ag­ing direc­tor Robert Mel­lor call­ing for between 2 and 8 per cent growth for Syd­ney.

Such calls range from just equal to, to well above, the expect­ed rate of con­sumer price infla­tion. So they’re a return to the usu­al prop­er­ty mantra that house prices always rise faster than con­sumer prices because of the “fun­da­men­tals” of (a) a ris­ing pop­u­la­tion and (b) tight sup­ply.

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About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.